Monday Morning Post – State of The Business

Back on an F train commute, and ready to spew forth another time limited post.

Since I covered ethos last week, I want to touch briefly on tactics and vision in this one. Let’s revisit the fundamental question: can my business earn enough to free me from location dependence?

Let’s use Kevin Kelly’s 1000 True Fans math to see what modest success would look like, then work backward. Let’s set the quite modest goal of $1000 per month, which, to account for variability in the market, I’d boost to $1500. I currently have a $50 product for sale. Let’s say I’m earning $30 on that, after advertising and administrative costs (VA, web hosting, any cost I wouldn’t have to take on were I not running a business). To make that $1500 I’d have to sell 50 videos per month, or slightly more than one-a-day. For reasons I detailed in past posts, it’s extremely hard to get a handle on a stable conversion rate (percentage of people who see an ad who eventually buy, or, more usefully, eventual revenue that one dollar on advertising brings), that increases linearly as I increase ad spending. Instead the curve looks like an tilted parabola: the classic diminishing returns curve. Suspicion: the size of the market I’m hitting up on the platforms I’m advertising is fixed, and I have to wait for natural “churn”, as new drummers age into the target range, etc. One thing I’ll definitely do in a future business is try to get my head around the size of the market.

So while I employ methods to both increase conversion and increase traffic, I’m trying a Ten True Clients strategy in parallel. Ten True Clients is essentially ten people willing to give you $100 per month for Something. On that side I’m pitching a premium coaching course to existing customers. Fifteen “true clients” per month is another way to arrive at the target monthly min. With this course, the challenge will be making it valuable enough to command the pricetag while keeping it automated enough that I’m not just teaching private lessons by proxy.

I’ve got two pilot clients already, and my aim is to experiment with their services, continuing to add new clients, until I find the best leverage points. What’s the Venn diagram of most value to these folks with least Recurring time commitment to me. (I don’t mind spending a lot of time on a resource that will be self-sustaining once complete, for instance a lesson plan that lets students “choose their own adventure” based on how certain exercises “feel” to them, or, as a member of a mastermind suggested, a social network like LinkedIn, that would let students critique and learn from Each Other’s videos.) But first I need market intelligence, which means a small degree of virtual private teaching.

Not for nothing, I think this or next month might be the first 1K revenue month. I’m holding off publishing monthly earnings reports until them, as I’m hovering in the $100-300 profit/month range depending on ad spending. Releasing the last chapter of the series, optimizing the price point (maybe by adding some extra Evergreen features like lesson plans), and getting the coaching underway should see that number tick up. Again, the goal is Recurring 1k Profit, which is a very different beast from a good month of 1k Revenue.

Ok. Pulling into the station. See you soon!

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Meta Post – On Posting

My new commute affords me more time to post on this blog. Hurray!

Challenging myself to write the entirety of a post on a short subway ride.

So what’s up with me?

Still working toward the goals outlined in the New Year’s post. (Post belonging to the new year.) Location independence. Smaller mental footprint at my day job. Mandarin. It’s important to “restate your assumptions,” as Max Cohen, the hero of Darren Aronofsky’s Pi so often does.

And just to get meta for a second, that’s why I’ve decided ultimately that writing this “personal journey” blog is beneficial, in spite of some thinkers who caution entrepreneurs to conserve their “sweet glucose” for their business. Well, I think I’ve been doing that. I created a reality show and am launching a coaching course with the help of my customers. I think I can spare some glucose for a Breaking Ferriss post.

Besides, the “conserve the glucose” canard underestimates the importance of Restating your Assumptions. Which is important to staying on target and avoiding “mission creep”. My goal is not to build a multimillion dollar enterprise to pump up my ego. It’s to free myself from location dependency and money worries, and to take action on the central premise of Four Hour Work Week, which is the insight that you can be the architect of your life. That you don’t need to take opportunities that are dangled in front of you just because they’re dangled. You can create your own opportunities.

So my business is in motion. It’s making progress toward being an earning machine, and as I make that progress I’m learning ever more about the leverage points where value is created. The apex of the Value Chain.

But the wonkier I get the less relevant this blog will be for the average reader. So I’m choosing to ruminate on some life lessons. My cognitive bias is my Fear of Standing still. The force that motivated me to leave Montana at age 18, and move to a similarly sized town to attend college at a university of similar caliber (and higher price tag). My central insight of this week? The paradox of progress is that it often requires a deep and profound acceptance of who you are at the present moment. Otherwise you’d be stuck in the trap of trying to define your identity by your progress or lack thereof, and be far more susceptible to those classic cognitive biases like loss aversion, which might cause you to miss opportunities and avoid worthwhile risks.

Make progress by accepting the present? It doesn’t seem to jibe.┬áBut consider the alternative: “I need to achieve success so I can define myself as successful.” Sure, that’s a motivator of sorts, and to a degree none of us can avoid it.

But isn’t “I accept and love myself, I’m deeply engaged in the present, and I’m taking action to set myself up for ‘success’, remembering to enjoy the journey” a lot better?

Even if it sounds like some Burning Man houey? (Never seen that word written – made a stab.)

Anyway, time’s up.

Back at you next time.